Contemporary Strategy Analysis.

Date: 2015-10-07; view: 579.

Robert M. Grant.

Fifth edition, Blackwell Publishing Ltd, 2005, pp 211-212

For top management tasks, information technology so far has been a producer of data rather than a producer of information – let alone a producer of new and different questions and new and different strategies.

The people in Management Information Systems (MIS) and in Information Technology (IT) tend to blame this failure on what they call the “reactionary” executives of the “old school”. It is the wrong explanation. Top executives have not used the new technology because it has not provided the information they need for their own tasks. The data available in business enterprise are, for instance, still largely based on the early-19^th-century theorem that lower costs differentiate businesses and make them compete successfully. MIS has taken the data based on this theorem and computerized them. They are the data of the traditional accounting system. Accounting was originally created, at least five hundred years ago, to provide the data a company needed for the preservation of its assets and for their distribution if the venture were liquidated. And the one major addition to accounting since the 15^th century – cost accounting, a child of the 1920s – aimed only at bringing the accounting system up to the 19^th-century economics, namely, to provide information about, and control of, costs. (So does, by the way, the now-so-popular revision of cost accounting: total quality management.)

But, as we began to realize around the time of World War II, neither preservation of assets nor cost control is a top management task.